First four months of current fiscal year: Loans form major chunk of dollar inflows

ISLAMABAD: The government is heavily relying on fetching $409 million through commercial loans from banks out of the total dollar inflows of $692 million in the shape of foreign loans and grants during October 2021. The loan amounts have a major chunk out of the total received dollar inflows during the first four months of the current fiscal year.

The increased reliance on foreign commercial loans showed that the government was desperate to generate dollar inflows, keeping in view the pressing requirements on external accounts. At a time when the IMF agreement was not yet finalized during the last month, the government was left with no other option but to generate increased dollars through mustering inflows from a considerably easy way for getting loans from international and local commercial banks. The government has fetched dollar inflows to the tune of $3.898 billion in the shape of foreign loans and grants during the first four months (July-Oct) period of the current fiscal year. The foreign loans and grants stood at $3.225 billion in the same period of the last fiscal year 2020-21. "In October 2021, the government has been able to get loans of $692.5 million from multilateral and bilateral creditors,” the official data of the Economic Affairs Division (EAD) showed.

From bilateral donors, Pakistan has obtained $120.2 million and China remained the largest bilateral donor as Beijing has so far provided $73.25 million. The USA was the second-largest bilateral donor as Washington provided $25.99 million in the first four months of the current fiscal year. The government fetched over $1 billion through the issuance of Eurobond in July 2021.

Out of the total budgetary estimates of $8 billion raised through commercial banks, the government has so far generated over $866.4 million during the first four months (July-Oct) period of the current fiscal year.

From the multilateral creditors such as the ADB, WB and Islamic Development Bank, Pakistan has so far obtained foreign loans to the tune of $1.869 billion during the first four months of the current fiscal year. The ADB provided loans of $581 million, Asian Infrastructure Investment Bank $37.7 million, zero amount from EIB and EU, WB’s IBRD $111.3 million and WB’s IDA $680.36 million, IDB $446 million and IFAD $9.91 million.